The opportunity costs of selecting one alternative rather than another.

A Glossary of Political Economy Terms

When choices are made (collectively or by an individual) to accept having less of one thing in order to get more of something else, the results are called trade-offs. For example, when one is allocating (limited) funds, the trade-off usually involves reduced spending for some purposes in order to be able to spend more for other more urgent purposes. However, the concept does not apply only (or even primarily) to decisions involving money. A student faced with the choice of spending Saturday studying for a Political Economy exam or shopping at The Mall makes a trade-off of shopping time for study time in deciding how many hours to study and how many to spend shopping. Society also makes trade-offs -- such as, for example, between its need for a more plentiful supply of energy and its need to prevent excessive deterioration of the environment caused by energy production technologies. Evaluating trade-offs, when done carefully and systematically, involves comparing the costs [see opportunity cost] and benefits of each of the available alternatives with each other. Most choices (and thus most trade-offs) are not all-or-nothing decisions; rather they typically involve small changes at the margin -- a little more of this at the cost of a little less of that. [see marginal analysis] Consumers continuously practice marginalism and make trade-offs as they consider whether to buy one more unit or one unit less of a good or service in their efforts to obtain a mix of goods and services that afford them the greatest satisfaction for their available buying power. Producers must constantly be deciding (and reevaluating) their trade-offs in choosing whether to produce somewhat more or somewhat less of a particular product, whether to add a few more workers or lay a few off, whether to invest in more plant and equipment or whether to close down some of existing capacity, and so on -- in their efforts to maximize profits.

Trade-off means an exchange of one quality or thing for another. Thus, in comparing alternative configurations for transport aircraft, it may be possible to trade off speed for payload and still maintain the same total transport capability per month in the system. In value analysis and decision theory the concept of tradeoffs in the decision maker 'S preferences is used extensively as a basis for establishing MULTIATTRIBUTE VALUE FUNCTIONS and MULTIATTRIBUTE utility functions. See: value , utility (IIASA)

The value of something which has to be given up in order to get something else which is desired (e.g., the environmental cost incurred to obtain economic development). Sustainability can be evaluated by the sum of the various social, economic, and natural resources where the degree of use, exchange and trading among resources will vary according to the values given to each. Trade-off patterns are therefore determined by the different properties of a system, and their importance to different groups. The understanding of social dynamics and resource-use systems and the evaluation of related trade-offs, in terms of equity, productivity, resilience, and environmental stability, are useful to envision alternative development scenarios. Scialabba (1998)

A trade-off (or tradeoff) is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect. More colloquially, if one thing increases, some other thing must decrease. Tradeoffs can occur for many reasons, including simple physics (into a given amount of space, you can fit many small objects or fewer large objects). The idea of a tradeoff often implies a decision to be made with full comprehension of both the upside and downside of a particular choice, such as when a person decides whether to invest in stocks (more risky but with a greater potential return) versus bonds (generally safer, but lower potential returns).